Milot Corporation Is an Oil Well Service Company That Measures

question 105

Multiple Choice

Milot Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for April. When the company prepared its planning budget at the beginning of April, it assumed that 32 wells would have been serviced. However, 29 wells were actually serviced during April.
The "Servicing materials" in the flexible budget for April would have been closest to:

• A) $16,000
• B) $16,662
• C) $14,500
• D) $15,100

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Definitions:

ISO 9000

A set of international standards on quality management and quality assurance developed to help companies effectively document the quality system elements required for maintaining an efficient quality system.

International Marketplace

The global economic environment in which businesses operate, allowing for the exchange of goods and services across national borders.

Quality Objectives

Goals that relate to the consistency and excellence of a product or service, usually defined in a company's quality management system.

Quality Control

The processes and measures implemented to ensure that products or services meet specified quality standards.